The Department of Labor\u2019s Employee Benefits Security Administration (EBSA) released Compliance Assistance Release No. 2025-01. For those of us keeping track at home, this new guidance effectively rescinds the now infamous 2022 Release that sent plan sponsors and ERISA attorneys into a quiet panic about the viability of cryptocurrencies in 401(k) plans.<\/p>\n
Let\u2019s rewind: the 2022 Release, issued under the Biden Administration, warned plan sponsors to exercise \u201cextreme care\u201dwhen it came to offering crypto investments in their retirement plans. \u201cExtreme care,\u201d while not a defined legal standard under ERISA, had the kind of chilling effect you might expect from a phrase better suited for a high-altitude mountain expedition than for investment lineups. While the 2022 Release didn\u2019t carry the force of law, it carried the unmistakable weight of regulatory intimidation.<\/p>\n
The new release changes that tone. It doesn\u2019t endorse crypto. It doesn\u2019t oppose it either. Instead, the DOL is stepping back into a more traditional, neutral stance\u2014one rooted in ERISA\u2019s actual fiduciary framework. That framework, in case we\u2019ve forgotten, requires plan fiduciaries to act solely in the interest of plan participants, with the \u201ccare, skill, prudence, and diligence\u201d of a prudent person familiar with such matters.<\/p>\n
No more \u201cextreme care.\u201d Just regular, good-old-fashioned prudence.<\/p>\n
The DOL now clarifies that the 2022 Release overstated its hand. Today\u2019s release recognizes that ERISA does not single out asset classes for preemptive warning labels, and that it\u2019s not the DOL\u2019s role to referee which investments are inherently worthy or not. That\u2019s the job of the fiduciaries\u2014plan sponsors and committees\u2014who are expected to do their homework and make prudent decisions based on facts, risk assessments, and participant needs.<\/p>\n
So what does this mean?<\/p>\n
If you\u2019re a plan sponsor who had considered offering cryptocurrency investments\u2014either directly in a core menu or indirectly through a brokerage window\u2014but held back out of fear of regulatory scrutiny, the temperature just dropped a few degrees. You\u2019re not being handed a green light. But the red light has been lifted.<\/p>\n
Of course, just because you can offer crypto doesn\u2019t mean you should. Cryptocurrency remains volatile, complex, and poorly understood by many plan participants. Fiduciaries still have a duty to evaluate whether any particular investment option, crypto included, aligns with the goals of the plan and the needs of its participants. That includes due diligence, risk assessment, and participant education\u2014same as with any other investment.<\/p>\n
As always, plan sponsors must walk the fine line between innovation and caution. The difference now is that the DOL is no longer trying to push them off that line. Welcome back to fiduciary neutrality.<\/p>\n
<\/span><\/p>","protected":false},"excerpt":{"rendered":" The Department of Labor\u2019s Employee Benefits Security Administration (EBSA) released Compliance Assistance Release No. 2025-01. For those of us keeping track at home, this new guidance effectively rescinds the now infamous 2022 Release that sent plan sponsors and ERISA attorneys … Continue reading